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Why Small Businesses Are Losing On Social Media

A new report from online business community Manta shows that, desperate to increase sales numbers in 2013, American small business owners are turning up on the social web in droves. The trouble is, no matter how much time they spend, they’re simply not seeing a return on investment.

Social media use is trending upward according to the survey of more than 1,235 small business owners, no surprise given the attention paid to the various social platforms by big businesses and media outlets. Nearly 50% have increased time spent on social media this year and nearly 55% say they’re using platforms like Twitter and FacebookFacebook as a primary tool for either acquiring new customers of generating sales leads.

It all sounds promising until this head-scratching result: despite their dedication and belief that social media is the Hail Mary of small business owners everywhere, more than 60% of small business owners say they haven’t seen any return on investment from their engagement online. None.

“First of all, small business owners are being sold on the strategy of social by ‘experts’ who are trying to get them to pay to set up accounts,” Rubin says, talking, of course, of firms not unlike his own who manage social media platforms for businesses. “But more importantly, their expectations are being set up in the wrong way.” Set up, it seems, for failure.

First up, if an expert or strategist tries to sell you on the notion that setting up a Facebook page or Twitter handle (or even a LinkedIn company page) will open the floodgates to an Internet’s worth of sales leads, they’re selling you some bad medicine. “It’s not going to cut it,” Rubin says. “Social actually can be a powerful lead generator,” Rubin says, but not in the way SBOs think. Jumping online to check in on Facebook once a day or posting current sales deals isn’t going to bring the business in. It just isn’t.

Instead, he says the only real way to use social to bring in new sales is to dedicate a staffer (think low-level, he says, “Think your teenaged son or daughter.”) to spend some serious time online just listening. “If you’re selling insurance, or plumbing, carpeting or other services,” he says, “Listen for people who are complaining about their current service providers. Those are leads worth pursuing.” Filters and using social as a search tool can help, but the most critical factor here is time. According to Manta’s survey, despite the increase in time from 2012-2013, more than half of small business owners spend less than three hours a week online.

It’s frustrating, of course, this notion that you can’t simply set something up and watch the sales stream in—which explains the disappointment of the majority of business owners surveyed who say they aren’t experiencing a return on their investment in social. “Small business owners are being told social can generate leads and bring in new customers, so they often consider it as another direct marketing vehicle, like getting their company into a weekly ValPac or Penny Saver circular,” Rubin continues. Those directives are easy to measure. You spend $1000, you get 20 new customers as a result.

In contrast, social is a patience game, which for many can be a bitter pill. “Return on relationship takes time,” he says. “People are being sold on social as a place to generate leads, but it’s really a place to build loyalty, answer customer service questions and to build a community.” These things take time, he says, and commitment to the platform, but in his experience they have proven to be the value that does result in an increase in revenue. How? Through trust and loyalty.

“Any business owner small or large will say that’s the win,” Rubin says. “If people trust you they’re going to be loyal. If they’re loyal, their average order will be higher, the frequency of their purchases will be higher and the life expectancy of them as a customer will be longer.”

According to this survey from Manta, small business owners are eager to embrace social media, but they’re going about it all wrong—and it’s creating real discontent. Rubin—who has seen first-hand the results of social media marketing and building communities between brands and consumers—says that with a few subtle shifts in priorities and an adoption of the long-view, small business owners can put themselves back on the path towards success.. and sales.

“Small business owners have got to be thinking of their social presence as first and foremost an extension of what’s happening in their physical locations,” he says, whether it’s a storefront of service business. If customers come in for local gossip, then tear it up online, he says. “Facebook is a great place to extend your personality online so that customers existing and new feel connected.”

What Facebook isn’t is a portal to millions in instant revenue. Once small business owners can appreciate that, they’ll have a much better time of it—and long-term reap much more profitable rewards.

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Meghan – First, this article is right on the mark. However, there is much more to add.

I would love to talk with you about this, having just released a book by Wiley this week that addresses this issue, and provides specific methods for mainstream to get results with social media.

I founded and operated a landscape business for 20 years, and used the same practices then as I do now to generate leads from traditional print media – the difference now is that media is not only digital, it is also profoundly social.

I disagree with the practice of assigning a low level “teenager” to the task because they don’t have the practical business experience with which to make the right business decisions. That’s crazy. If revenue is the lifeblood of the enterprise, do you assign skilled professionals or neophytes? There is a reason why Ford CMO Jim Farley is actively involved in their social media efforts – on a personal leve.

This is why I like to say the one thing small businesses leave out of the social media equation is what makes it work – YOU. That means the small business owner or their leading managers with years of experience.

Today I published a 10 minute video interview at builtinsocial.com that will give you some insights into my methods. You’ll find my contact info there and on all of my social media channels.

Great piece, Meghan. The key observation is Ted Rubin’s suggestion that small businesses look for conversational opportunities in social media. “If you’re selling insurance, or plumbing, carpeting or other services … listen for people who are complaining about their current service providers. Those are leads worth pursuing.”

Rubin suggests employing your son or your daughter to hunt down leads. The good news is that there are SaaS solutions (full disclosure: Leadfindr is one of them, and I am its CEO) which allow you to find discontented customers of your competition, or people with needs and intentions in social media and engage directly. The results are dramatic. Our clients have seen click-throughs of 60%+

That engagement at the point of need is what generates ROI from social.

Some really good points here. Most of times small businesses are faced with the difficulty to measure what Social Media success is and fail to grasp the fact that lead generation is the result of long term engagement.

Small Businesses are learning that an ROI in Social Media is like day one at a new store opening. If you don’t have other marketing mechanisms in place to move the prospect along, you could be dead in the water. This does not suggest ‘losing in social media’ as your headline states, rather as the Manta infographic depicts a development opportunity. Small Businesses have to develop their social media channels just as they developed their brick and mortar and advertising campaigns. It doesn’t happen overnight and there are missteps, but social media is an excellent way to keep your brand before prospects and customers while managing the sales funnel. The bottom line is that social media requires a strategy and dedication to do it right and I believe small businesses are learning how to do that – some with and some without professional marketing support.

Collective Bias is going to be an up and comer without a doubt (anticipating them to be one of our new strategic partners very soon!).

There are a lot of people out there talking about what they think they can do for their clients but very few of them, as Ted Rubin mentioned, actually know the recipe to the secret sauce!

Affinity branding is a very deliberate and emotionally driven process and very few are in tune to what it takes to initiate and build lifetime customers, or even loyal customers that will sing the praises of your brand.

Collective Bias is one of the very few shops that knows what the right ingredients are and how to best combine and then serve them. Moreover, they know what communities prefer what dishes and that is an extremely important metric in achieving the ultimate goal which is to strengthen and endear your clients’ brand(s) to and within their respective communities.

Great article. Another item I would add is most times the business does not establish goals and ways to measure them beforehand. The other issue is that the business and experts think being social means engaging only on Facebook, Linkedin, and Twitter. What they forget or do not know is that social media is how the internet works. Two way communication and engagement is the key to maximizing your digital footprint.

This means a business must be social on their own website as well as on social media platforms. If the company’s social media strategy does not include being social on their own site then they are never going to properly leverage social media or reap the benefits.

Understanding the opportunity + the hard work it takes isn’t easy (or we’d all be successful).

Time is on our side – there is a tendency to forget that when we hear buzzwords and see fancy shiny new things that will help grow sales with minimal effort. How a marketing and sales tool (like social platforms) is used depends so much on individual business goals.

Poor results from agencies that don’t educate, manage expectations, and identify exactly what’s needed for success can make businesses wary of agencies or outsourcing. That’s bad for those businesses because they either stop, assign a low priority, or assign resources that don’t match the expertise needed (still resulting in poor results).

Collaboration, outsourcing, or partnerships – whichever approach – bring value the businesses when what’s important to them is articulated from the beginning. Most importantly, every online marketing opportunity out there isn’t right for every business – including social platforms.

You have to find a way to make Social Media sites work. There are submitters where you can announce something automatically to all of your social media sites at the same time like Hootsuite.com You can get many excellent connections on Linkedin and join some great groups. Linkedin has proven to be much more than just a place to plant your resume. The priority is to brand the things you wanted to be branded and go from there.

As a completely free courtesy, we offer many other ways to increase your presence online. At Tapsearch Com World at http://tapsearch.com, we have unlimited free web services, tools, submitters, promoters, ads, announcement message boards and bulletin boards. We feature some of the best in free search engine, auto-directory, back links and pinging submissions services plus free web pages. There are also branding services like Brand Yourself and About Me. Take a few days and try any of these free service and see what happens. Some of the back links auto submitters are the best way to start.

This article really hits two key points. 1 – businesses need a realistic view of the capabilities of social media for business, and 2 – what it will take to accomplish that (return on relationship). No more living in fantasy land. It’s time to realize there’s no such thing as a quick fix on any platform.

Here is a related article that talks further on this. It may be an interesting read for you: http://ht.ly/knNrW

… and yet, small businesses stand to gain the most by using social media smartly. Not to be totally self-serving, but our company blog is all about social media for small businesses: www.sociallystacked.com

This is a great article. Many businesses are loosing in the social media game, but that is because they dont know where to spend time. This is a resource you should share with your readers http://ignitevisibility.com/where-to-spend-time-on-social-media-for-business/

Great article. Another point of interest is in your business’s target and who is actually spending money and planning to spend. Reality is that a lot of Baby Boomers (cha-Ching) are a bit behind in social media applications. Point #2: Content is still king. If your message/ post is not relevant and easy to understand well, sadly, you are wasting your resources. Point #3: It’s a jungle out there! Keep the message fun and simple. Treat it like a highway billboard.

Awesome article! Even if I’m a bit late in on this one – I think it’s pretty much still holding true a year later, and really hits home for me – I am gradually offering more social media marketing to my clients, and am just now grappling with the hours vs costs for a small business with modest sales who is hoping to take their business to the next level with the help of SEO and social marketing. The advice given by Mr. Rubin really resonates…I see where a lot of small (tiny) businesses view social media as the answer to their prayers. If only it were that simple! So it’s my job to give them a dose of reality and show them the numbers that go along with that does of reality.